Articles contributed by Weinhold Legal v.o.s

The term â€śDue Diligenceâ€ť is commonly used when referring to a process through which a potential buyer evaluates a target company, an enterprise or its assets. Typical due diligence usually focuses in particular on the area of law, taxes and finance with the aim on emphasizing strengths and weaknesses of the target and detecting risks connected with its acquisition. For the sake of simplification, we will use the term â€śenterpriseâ€ť or â€śtargetâ€ť when talking about subject matter of the due diligence.

Against the backdrop of the worsening economic conditions, company management are often faced with the decision whether certain business activities should be terminated or if different measures should be taken with respect to cost reduction. In this article, we will examine various measures that can be taken within a given context. At the same time focus will be placed upon the circumstances in respect of individual cases. Concurrently, it is nevertheless always advisable to carry out a detailed and extensive analysis of the economic, tax and legal aspects in regard to the circumstances surrounding the given case.

The main corporate entity to be discussed is a joint-stock company (a company limited by shares, the â€śCompanyâ€ť). The Company issues shares and such shares that are recognised must be in documentary or book-entered (registered in Security Centre) forms are. Subject to the approval and fulfilment of the statutory conditions, the shares may be submitted for trade on the publicly (regulated) markets. The minimum amount of registered capital is equal to CZK 2,000,000.

Czech legislation provides for various rights and duties for both employers and employees. This aim of this article is not to provide an exhaustive list of those rights and duties, but rather to acquaint readers with the essentials. The basic rights and duties of the employer and the employees in the Czech Republic are laid down in particular by Act No. 262/2006 Coll., Labour Code, Act No. 309/2006 Coll. stipulating further requirements for health and safety protection at the workplace and Act No. 435/2004 Coll., on employment. For greater clarity, the rights and duties of employers and employees are divided into several groups within the following text.

Under Czech law, public bids are considered public proposals to purchase shares, interim certificates or other transferable securities in public joint-stock companies incorporated in the Czech Republic when a bidder intends to acquire stock in such company to allow it to establish control or increase its existing control over a target.